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Another setback for Quebec's shale gas industry: part 3 - social acceptability issues

Starting in 2008, the oil exploration and production industry generally, and the shale gas industry specifically, have drawn increasing attention from developers, governments, environmental groups and citizens alike. The most recent report of the Bureau d’audiences publiques sur l’environnement (“BAPE”) number 307 on the issues raised by shale gas exploration and production in the Utica Shale of the St Lawrence Lowlands (the “BAPE Report”) is but the latest step in a process that the Québec Government has committed itself to completing in order to assist it in determining the relevance and sustainability of developing this industry in Québec.

Back in 2008, the St Lawrence Lowlands became the province’s prospective El Dorado for natural gas exploration and production after work was completed by Junex. Developers soon jumped on the bandwagon and proceeded with exploratory drilling in the region. In 2009, when citizens and environmental groups expressed growing concerns and opposition, the BAPE was entrusted with a first mandate on the sustainable development of the shale gas industry in Québec. In 2011, the BAPE published its first report, which noted a substantial level of uncertainty and lack of scientific knowledge on the potential impacts of shale gas exploration and production, and proposed that a strategic environmental assessment (“SEA”) be conducted to address this deficit in knowledge. The government at the time therefore mandated a committee of experts to conduct a SEA on shale gas.

On January 30, 2014, after the Comité sur l’évaluation environnementale stratégique completed its work, the BAPE was entrusted with another mandate under section 6.3 of the Environment Quality Act (CQLR, c Q-2) (“EQA”) to inquire into and hold public hearings on issues relating to exploring and producing shale gas in the Utica Shale of the St Lawrence Lowlands.

The BAPE began its mandate on March 31, 2014. From March 31 until April 17, and then from June 2 to June 18, public hearings were held in Saint-Hyacinthe, Bécancour and Saint-Agapit. A mission was organized in Pennsylvania from July 7 to July 11 to allow the commissioners to meet with government officials and stakeholders about shale gas exploration and production activities.

The BAPE Report was publicly released on December 15, 2014.

This third and last of three bulletins on the BAPE Report deals with social acceptability issues.

Noting that the expression “social acceptability” is not defined, the BAPE puts forward the idea that it is a collective and evolutionary process that involves a considerable number of local and regional players. Therefore, “[TRANSLATION] the social acceptability of a project does not consist of general consent, but rather of a consensus among stakeholders reached through consultation and exchanges.”[1] When it comes to this issue, this new BAPE report is in line with its earlier report on the operation project of an apatite mine in Sept-Îles (Rapport 301 relativement au Projet d’ouverture et d’exploitation d’une mine d’apatite à Sept-Îles) published in December of 2013.

Need to define “social acceptability”

The BAPE has observed that the shale gas industry’s social acceptability has evolved in the last few years, from the budding interest in this industry in Québec beginning in 2008, up to the present day. Some describe “social acceptability” as a component of sustainable development, a concept integrated into Québec’s legislative corpus thanks to the Sustainable Development Act, even though the act does not even use the expression “social acceptability” and no legislative text in Québec defines it. Still, we have been hearing about “social acceptability” in government speeches, from the media and throughout the mining, hydro-electric, wind power and other energy industries for a dozen or so years now. One example would be the Guide à l’intention des élus municipaux du Québec (only available in French), a guide prepared by French and Quebecois researchers and by the Conférences régionales des élu(e)s des regions for the regions targeted by major wind farm projects in 2008.

The BAPE believes it is imperative that the government adopts and shares with all stakeholders a definition of social acceptability and indicates how it intends to assess whether shale gas production in the St Lawrence Lowlands has received the approval of the communities concerned.

Era of “social unacceptability”

Based on the information gathered during the SEA and in keeping with the findings stipulated in its earlier report on the operation project of an apatite mine in Sept-Îles (Rapport 301 relativement au Projet d’ouverture et d’exploitation d’une mine d’apatite à Sept-Îles) published in December of 2013, the BAPE ascertained that citizens were mobilized by the current regulatory uncertainty and the potential impacts of the shale gas industry on the province, with the result that shale gas production has been refused by a number of hearing participants and declared socially “unacceptable”.

In the course of the commission’s work, le BAPE identified six factors that strongly influenced the social patterns observed in the past years associated with the potential production of shale gas.

State and industry too close The State was perceived by some as being too close to the industry when the latter’s role and expertise in the field was questioned, thus casting doubt on the State’s capacity to intervene and ensure compliance with the regulations in force.

Negligible participation of municipalities and local populations in decision-making process Some interveners believe that the municipalities and local populations were invited to the debate too late, when they should have been playing a lead role.

Economic aspect given too much importance At the time, the economy was the chief frame of reference both in the debates and during negotiations with certain groups.

Knowledge of citizens overlooked According to some interveners, scientific knowledge, held by public and private decision makers as being more legitimate, was privileged in the debates to the detriment of the knowledge of citizens.

Ignorance of territorial dynamics and local economies The territorial dynamics were neither known nor considered at the time the gas project was designed, any more than were the existing types of economies, such as the agricultural industry made up of family businesses.

Lack of information and communication respecting these activities’ impacts The communities received little information, and what they did receive was inaccurate due to the fact that the information available at the time was incomplete and often contradictory, specifically regarding the impacts of fracturing technologies on water tables, the breadth of gas projects (number and location of wells) and the possible effects on agriculture.

It is clear from the BAPE’s observations that a number of interveners are worried that shale gas production is incompatible with residential and agricultural use of the territory. Unlike most other North American regions where shale gas is produced, in Québec, extraction activities like mining exploration and production generally take place on public land, in remote areas, isolated from large urban centres. These so-called remote areas cover more than 92% of the Québec territory, but in the case of the St Lawrence Lowlands, over 92% of the area covered by shale gas exploration licences is located on private land. This information is important when it comes to assessing the social acceptability of shale gas exploration and production in the St Lawrence Lowlands. Indeed, the scope of the impacts these activities might have on communities is in large part associated with the density of uses and existing developments, especially the residential and agricultural uses.

The BAPE notes that shale gas exploration is far from having achieved social acceptability. And since the government has made social acceptability a prerequisite for going forward, the findings and guidelines provided in the BAPE Report, such as the need to define what social acceptability is and to determine how projects will be assessed in this regard, will certainly give food for thought over the next few weeks and months.

Developers and producers need to adopt good CSR practices

Of all of the factors listed above, the BAPE notes that a project’s perceived risk or threat to the quality of life or environment of a community is of the utmost importance to that project’s social acceptability.

Naturally, the BAPE acknowledges that citizens’ concerns can at times be based on a certain lack of understanding. Even so, the BAPE believes it is crucial that these concerns be taken into consideration. Literature holds that a risk will be deemed acceptable by a community if it can accept the potential consequences and damages that might result, considering the likelihood that the risk will materialize. In their assessment of a project’s risk, developers will therefore have to consider the risk both as it is scientifically assessed and as it is perceived by the population. This will require developers to improve communications with citizens and to adopt an open approach, all of which could contribute to reaching a social consensus.

Here are a few of the good CSR practices noted by the BAPE:

making the relevant information easily accessible to citizens so that they can express an opinion on a project’s risks and acceptability;

developing a CSR program that will be implemented from the project’s conception and continue throughout the implementation and carrying out of the project’s activities;

integrating environmental, ethical, community relations and corporate governance commitments and practices into the CSR program.

The BAPE took an interest in some of the CSR frameworks and policies publicly available. One of these, formulated by the Canadian Association of Petroleum Producers (“CAPP”), proposes integrating guidelines into an environmental management framework for hydraulic fracturing activities, and gives examples of good practices in the following areas:

disclosure of fracturing fluid additives;

assessment and management of the risks associated with fracturing fluid additives;

The BAPE notes that in the shale gas industry, CSR programs and policies differ from one company to the next. The BAPE believes it would be expedient for gas companies that are active in Québec to agree on a common CSR framework or policy in order to make it easier for citizens and interested groups to consult information. According to the BAPE, this draft common CSR framework or policy should be subject to a public consultation.

Noting the great importance interveners place on openness and the disclosure of information by developers, the BAPE believes that the MÉRN and MDDELCC should create an information platform that will give easy access to homogenous, reliable and timely information for each well drilled in Québec.

The BAPE Report is in line with recent orientations expressed by the BAPE with respect to social acceptability. Since the government has made social acceptability a prerequisite for going forward with exploration and production of shale gas in the St Lawrence Lowlands, the findings and guidelines provided in the BAPE Report, such as the need to define social acceptability and to determine how projects will be assessed in this regard, will be a topic of interest over the next weeks and months. From then on, social acceptability will be an important part of the regulatory approval process relating to environment.

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